All About Advance Tax

//All About Advance Tax
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All About Advance Tax

With the soon emerging payment of last installment of advance tax for the current financial year 2018-2019, which is due on 15th March for all the assessee (other than 44AD and 44ADA assessee) and 31st March for assessee who are paying tax under section 44AD and 44ADA, let understand the concept Advance Tax: –

What is Advance Tax

As the name itself is self-explanatory, advance tax means payment of taxes in advance. In other words, ‘pay as you earn’

Who Should Pay Advance Tax?

Advance tax is payable during a financial year where the amount of tax payable is INR 10,000 or more.

Provisions of the advance tax shall not apply to an individual resident in India if the following conditions are satisfied: –

  1. The resident individual does not have any income chargeable under the head ‘Profit and gain of business or profession’; and
  2. The resident individual is of the age of 60 years or more at any time during the previous year.

It must be noted that advance tax is applicable to all the taxpayer, however, if the resident individual fulfills the above two mentioned conditions, then, he is not required to make an advance tax payment.

Is It Mandatory to Pay Advance Tax?

Yes, it is mandatory to pay advance tax, however, in case of late payment of advance tax, interest under section 234C and under section 234B is payable.

Interest payable under section 234C is explained in the preceding paras. However, interest under section 234B is payable if –

  1. The assessee had failed to pay advance tax; or
  2. The assessee has paid the advance tax, however, the same is less than 90% of total tax payable.

In case the assessee falls under any of the above cases, the simple interest @1% for a month or part thereof is chargeable for the period from 1st day of April  following the financial year to the date of determination of total income.

Advance Tax Due Dates

Provisions of section 211 of the Income Tax Act, 1961 specifies the installment of advance tax and due dates thereon.

Following table reflects the advance tax due dates for individual and corporate taxpayers [applicable for taxpayers other than assessee covered u/s 44AD (1) or u/s 44ADA (1)] –

On or before  June 15th 15% of advance tax
On or before  September 15th 45% of advance tax
On or before  December 15th 75% of advance tax
On or before  March 15th 100% of advance tax


Following table reflects the advance tax due dates for taxpayers who has opted for presumptive taxation scheme – business income [section 44AD (1) or section 44ADA (1)]–

By  March 31st 100% of advance tax